Three former fraternity brothers suspected of manipulating several horse racing bets last month, including the $3 million Breeders' Cup Ultra Pick Six wager, surrendered to police today and were charged in U.S. District Court with conspiracy to commit wire fraud.
Chris Harn, Derrick Davis and Glen DaSilva, members of the Tau Kappa Epsilon fraternity while attending Drexel University in the early 1990s, separately appeared before Magistrate Judge Mark Fox to hear the government's complaint against them.
Afterward each of the men posted bail of $200,000 and was released on his own recognizance. If convicted, the three men could face a maximum penalty of five years in jail and a $250,000 fine, said James Comey, U.S. Attorney for the Southern District of New York.
The men did not enter pleas but have maintained their innocence through their attorneys.
In drug tests routinely given after arrests, Davis, from Baltimore, and DaSilva, from New York, tested positive for cocaine. As a condition of their bail, Fox ordered the pair to submit to thrice-weekly drug tests.
"We're not going to have you out there high on drugs," Fox scolded DaSilva. He warned DaSilva and Davis that they would go to jail if they failed any more tests.
The three have been under scrutiny since investigators discovered that Davis, the winner of the Breeders' Cup Pick Six wager on Oct. 26, and DaSilva, who won a pair of multi-race wagers a month ago, were "close associates" of Harn, a senior software engineer at Autotote, the computer wagering company that processes bets for the Breeders' Cup.
Harn, from Newark, Del., was fired on Oct. 30 for allegedly altering Davis's bet. The Newark-based company alleged that Harn had used his access to its computer system to change Davis's wager to include the winners in the first four races after the race results had been announced.
Harn also is accused of performing the same service for DaSilva, who won $1,851.20 in a Pick Four wager at Balmoral Park, a harness track outside Chicago, on Oct. 3, and $105,916 in a Pick Six bet at Belmont Park, a thoroughbred track in Elmont, N.Y., on Oct. 5.
Davis and DaSilva placed their bets via an automated telephone system operated by a Catskill, N.Y.-based off-track betting site.
After taxes were deducted, DaSilva deposited more than $80,000 in prize money into his bank account, which the government froze last week, said DaSilva's attorney, Edward Hayes.
"These defendants used their access to the computer system and Mr. Harn's expertise to create a sure thing," Comey said.
In its complaint, the U.S. Attorney for the Southern District of New York maintained that phone records would prove Harn was communicating on his cell phone with Davis "during the very time the Breeders' Cup races were being run."
Also, computer records show that Harn showed up at Autotote's headquarters though he was not scheduled to work, according to the complaint, and electronically accessed the computer file that held Davis's wager.
Sandoval reported from Washington.